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Industry Links

Published: Friday, 01 September 2006 07:00, Written by By Edward Boyle Contributing Editor

Innovation.” It's the secret behind the longevity of some of the world's leading companies.

Ford Motor Co. virtually launched the automobile industry with the development of the assembly line and the introduction of the Model T. Now it is vigorously working to develop hydrogen-powered vehicles.

Apple Computer was launched as the designer-friendly alternative to the PC and ultimately developed the iPod, which revolutionized the way music is sold, stored and, well, heard.

And Jim Hammer, fourth-generation president and CEO of Hammer Packaging, uses the word “innovation” as often as a fast food counter person asks, “Would you like fries with that?” to describe the reason behind the growth of his 96-year-old company.

“We have a very active innovation team. We actually present innovations to customers we have long-term contracts with, and we give them the first right to use that innovation for a period of time. Helping customers differentiate themselves in the marketplace is really key today.”

An Evolving Company

The fact that Hammer changed its name in 2005 to Hammer Packaging is the most visible evidence of the company's ongoing evolution. In package printing operations, Hammer Lithograph and New Frontier Packaging were consolidated to form Hammer Packaging. Hammer believes the new name better reflects the company's position in the marketplace as an industry leader in both offset and flexographic print technologies. The result: In 2005 the company continued its eight-year run of 10%-12% growth with its 360 employees generating more than $73 million in annual sales.

“We're really in the packaging marketplace more today than ever before,” notes Hammer. “Lithography is just one of the print technologies that we use. It really doesn't denote the company brand awareness we want to promote. With the name change, our customers can associate us with packaging.”

The company, which is ISO 9001-9002 certified, operates five facilities in the Rochester, NY, area, and Hammer suggests the company has plans to expand geographically, although he is confident of its ability to serve customers across the country from its East Coast facilities.

Today, Hammer's product mix still is predominantly litho-based (97% versus 3% flexo), but Hammer has been investing heavily in both the flexo and litho sides of the business to increase market share. It continued its record of “firsts” in 2005 with the installation of a seven-color, 64-in. KBA roll-to-sheet offset press, one of 11 it operates in Rochester that reportedly was the first of its kind in the world designed for the package printing market.

The company also installed a Heidelberg Speedmaster CD 102 press, which features a CutStar roll-to-sheet feeder. It is reported to be the first US CutStar installation to print on lightweight polypropylene from a roll. The eight-color press has both aqueous and ultraviolet coating capabilities and closed-loop scanning spectrophotometry. A second Heidelberg is scheduled for installation this year.

The Innovation Business

Says Hammer, “We don't want to be like everybody else. I was talking to someone a few weeks ago who said, ‘You're in the printing business.’ And I said, ‘You may call it that, but we're really in the innovation business.’ If all we do is put ink on paper, we'd be out of business. It's all about value-added.”

While still predominantly a sheet-fed paper converter, Hammer says his company couldn't ignore the increased demand for film-based labels and flexible packaging. He points to Hammer's investment in the KBA and CutStar equipment as evidence of his company's commitment to that growing market. In fact, Hammer says they will invest $10 million this year in new equipment and technologies, which will utilize film produced by ExxonMobil and AET.

“We're investing quite heavily in technology,” Hammer emphasizes. “We run a significant amount of OPP and film in general. Film is growing faster than paper [as a label substrate], and roll-fed makes a lot more sense than sheet-fed for film.”

Hammer Packaging is equally dedicated to innovation on the management side of the business. The company offers “vendor-managed ordering” and “vendor-managed inventory,” in which it can monitor customers' product levels automatically via computer and deliver more labels automatically when the inventory hits a minimum level.

That kind of service is one reason Hammer reports it's the largest converter of cut-and-stack labels in the country, controlling 54% of the bottled water market. “New age beverages” are its fastest-growing segment. That kind of growth in other markets is part of Hammer's five-year plan (currently in year three) to double its size.

In spite of the company's success, or perhaps because of it, Jim Hammer is concerned about several trends in the packaging industry. He's happy to see the diminishing popularity of reverse auctions — involving converters that bid down the price of a job on-line until it goes to the lowest bidder — but he's concerned about the growing number of commercial printers that are attempting to enter the label and packaging market.

“We're bombarded with commercial printers trying to enter our market because they're doing so poorly,” notes Hammer. “They're trying to fill the press and sell on price, but they don't understand the market. That's not where we want to be. We continue to invest in order to become a low-cost producer through technology, not price.”